Dark horse stock of the day; Crayons Advertising Ltd

On June 20, 2023 Crayons Advertising Ltd announced its financial result for the FY23. Post announcement, today the stock zoomed 10% during the intraday trading session and locked into the upper circuit. 

Today the stock opened at Rs 146.90 on NSE, a gap up 3.4% from its previous day’s closing of Rs 142. It was consolidating for an hour post-opening and gave a breakout at around 10:05 AM with an increased volume and eventually locked into the upper circuit. Currently, the stock is trading at Rs 156.20 with no sellers ready to sell the share in the exchange. The stock has generated a multibagger return of 140% on its issue price of Rs 65. 

Financial Performance 

The company’s revenue surged by 43.19%, climbing from Rs 193 Crore to Rs 276 Crore. Operating profit reached Rs 19 Crore in FY23 from Rs 4 Crore, with an operating profit margin of 7%. First-time company has achieved double-digit Operating Profit and Net Profit. The Net Profit of the company amounted to Rs 23 Crore with a net profit margin of 6.15%. 

In terms of debt, the balance sheet shows a debt of Rs 11 Crore in FY23 slightly increased from last financial year which was Rs 10 Crore, resulting in a debt-to-equity ratio of 0.21 times. The company holds an impressive Return on Capital Employed (ROCE) at 49.8%, while the Return on Equity (ROE) is at 44.6%.  

IPO Highlights 

Crayons Advertising had its IPO from May 22 to May 25, 2023. The IPO had an issue size of Rs 41.80 Crore and the lot size for the same was 2000. The price range for the shares was set between Rs 62 and Rs 65. On the last day of the IPO, the demand exceeded expectations, with oversubscription reaching 147.54 times. The public interest in the IPO was particularly high, with retail investors subscribing 169.94 times, Qualified Institutional Buyers (QIB) subscribing 45.20 times, and Non-Institutional Investors (NII) subscribing 231.59 times. The final issue price was Rs 65. Crayons Advertising hit the stock market on June 02, 2023, with an opening price of Rs 90 per share. By the end of the day, the stock closed at Rs 94.50. 

Company Overview 

Crayons Advertising Ltd, founded in 1986, is an integrated marketing and communications Agency. It was founded with the goal and aim of providing advertising solutions and has consistently grown its business horizons in the sector for over 36 years. They offer world-class creative, exceptional brand marketing strategy, pragmatic online & offline media planning & buying, cutting-edge digital expertise, on-ground & virtual activation capabilities, and design solutions that help clients in brand building. Also, it offers a high-end ecosystem and end-to-end ad-tech communication solutions platform. These are for advertising media services consisting of brand strategy, Events, Print Media, Digital Media, and Outdoor Media Services.